The Bala Cynwyd, Pa.-based firm sees the award as a validation of overlay portfolio management, an increasingly sought-after ingredient to holistic wealth management.

Overlay management is the process of aligning trading activity and managing cash flow while taking into account investor preferences and overall tax efficiency of investment portfolios.

“It’s been a long road since we filed the original patent applications in July 2000," says InvestEdge's co-founder and chief executive Robert Stewart.

InvestEdge's patent describes a front-office overlay-system concept in which data is refreshed from underlying books-of-record systems -- like those provided by vendors such asAdvent andSunGard -- without replicating accounting functions.

“Investment firms already have one or more books-of-record systems such as portfolio accounting, trust accounting and stock-record systems,” says InvestEdge's chief technology officer and co-founder R.C. Collins. “They don’t want or require another accounting system to provide much-needed front office functions.”

In addition to validating the overlay concept, InvestEdge hopes its new patent will associate its brand with a officially vetted approach to automating some of the functions around complex portfolio management.

And, though the patent isn't going to put any of its competitors out of business, it could help warn potential rivals off. "It only establishes a border," says Stewart. "It's up to us to patrol it - which is something we'll certainly be doing."

InvestEdge has been profitable for the past seven years, according to Stewart. The 10-year-old firm countsWilmington Trust,Glenmede Trust,TD Bank, andMerrill Lynch's Private Banking and Investment Group among its institutional clients. By the end of this year, Stewart figures the firm will have two dozen institutional clients.